60 Minutes to a Cheaper Phone Bill

What’s your second-biggest monthly bill? Take a look, and you might be surprised that after housing, you probably spend the most on your smartphone. But you have don’t have to—even if you’re eating up gigabytes of data with your PokémonGO habits.

A 2014 Cowen & Company study found that Verizon bills are most expensive, averaging $148, but even the cheapest, T-Mobile, rings in at $120. One in five people on a family plan pays more than $200 a month, according to Pew.

That’s almost $2,500 a year … that you could be spending elsewhere.

Introducing the Grow Savings Challenge, designed to help you cut back where you spend the most—like this triple-digit expense. The idea is simple: We’ll give you the information needed to renegotiate your bills in just an hour’s time. Give it a shot and tell us how it went. You can post on our Facebook page or Tweet @Grow_mag using the hashtag #GrowSavingsChallenge.

Traditionally, long-term phone contracts have hindered the one tool consumers have when trying to save money: comparison shopping. High early-termination fees made it impossible to switch carriers, which, in turn, eliminated bargaining power.

Fortunately, those days are nearly over, as contracts and phone subsidies have been replaced by interest-free financing. Now, when you’re ready for a new gadget, you can, for instance, purchase an iPhone 6S from Verizon outright for $650 or pay $27 a month for 24 months on top of your regular service charges. (The exact figures depend on current offers in your zip code.)

And there are no early-termination fees. If you want to change carriers, you pay off the balance on your phone “loan” and take it with you. This opens the door for tremendous savings because BYO-device plans cost significantly less than traditional ones. Better still, aggressive competition has carriers offering to pay switching costs.

With this in mind, here’s how to slash dozens off your monthly bill.

Ask about specials.

Watch just one hour of TV, and you’ll be bombarded with splashy phone commercials, advertising the latest deals. That means you should never be content with the plan you have. Your first to-do is to contact your carrier, and find out if they’ve rolled out a new package that would save you money, or at least give you more data at your current rate.

Speaking of which…

Downgrade your data–carefully.

These days, smartphone bills are basically data bills, so the critical question is: How much do you really need? The answer matters. Right now, the price gap between Verizon’s cheapest and most expensive individual plan is $70. At AT&T, the gap can be more than $100.

You should analyze your usage by poking around your online account, especially if you’re addicted to a new gaming app, for example, and worried about incurring overage charges (hint, hint). The NPD Group found that users average about 3 GB (gigabytes) a month, which necessitates a medium-sized plan, although a third of people consume less than 1 GB—so there could be a lighter-use option that fits your lifestyle and helps your wallet. (The PokémonGO database, a fan site, suggests that if half of a 2 GB data plan is allocated to playing PokémonGO, you can reasonably expect to play four to six hours per day without any issue.)

If you’re on the cusp of qualifying for a cheaper plan, think about adjusting your habits in order to save. Public hotspots, such as Comcast’s XFinity WiFi program, and enabling your WiFi settings at home and in the office make this feat easier.

This decision won’t be set in stone. Once upon a time, customers were (rightly) afraid to make plan changes because they’d unwittingly extend their contracts. But these days, you can tinker with your plan frequently—even mid-month. This is especially helpful if you’re dangerously close to triggering an overage fee.

Prepay it.

Now that you can bring your own devices to a new carrier, there are a ton of inexpensive options to consider, such as Walmart’s Straight Talk, which offers unlimited talk and text and 5 gigs of data for $45.

Such plans used to carry a low-quality stigma, but they’ve become so successful that the big four (Sprint, AT&T, Verizon and T-Mobile) now have their own versions. Plus, Mobile Network Virtual Operators like Total Wireless, Boost Mobile, and Cricket work closely with the big guys to access their networks, and offer plans for under $50.

None are appropriate for power users who binge watch TV on their phones, but average users can and should consider these plans.

Consider a competitor.

Remember: Competition is a wonderful thing! Back in December, Sprint promised to grant new customers data packages at half their current provider’s rates. Even if you stay put, you can use this info to negotiate your bill.

Call and say, “Can you match this?” You don’t know until you ask.

One 20-minute conversation could save you hundreds over the long run. Let us know how it goes.

This story was updated on July 14, 2016, to reflect the increase in data usage by PokémonGO players.

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